October 31

The Five Most Common Supply Utilization Management Mistakes That Are Holding Back Huge Savings for Most Healthcare Organizations


Boost Your Healthcare Organization’s Bottom Line Almost Overnight

It’s not getting easier to save money, especially as it is related to price. But there is a whole new world of savings available to you if you can avoid these five most common healthcare supply utilization management mistakes that are holding back huge supply expense savings:

  1. Thinking that your supply utilization savings are insignificant. Our empirical evidence shows that even hospitals with as few as 8 to 10 occupied beds can save one million dollars on their utilization savings. For a hospital, system, or IDN of greater size you can count on 7% to 15% of your total supply budget as a good benchmark for savings. So, supply utilization savings aren’t insignificant, but are significant at all healthcare organizations in the U.S.
  2. Letting your department heads or managers talk away these savings. Even healthcare organizations who are saving money by identifying their utilization misalignments are still missing hundreds of thousands of dollars in savings opportunities. This is happening by letting their department heads or managers talk away these savings by saying that their census was up for the period or a new doctor came onboard, etc. when the data says otherwise. If this is your situation, then you need new power tools to prove that the savings are real.
  3. Rationalizing that your vendors or GPOs will provide you with this data. There is buzz that your vendors or GPOs can provide you with your supply utilization data, but based on our research very few have proven that they can deliver. So, if you are depending on your vendors or GPOs to assist you with this challenge, don’t hold your breath or you will be gasping for air.
  4. Believing that your value analysis teams have these costs under control. Unfortunately, 98% of value analysis teams are focused exclusively on new GPO contract evaluations and implementation. However, these VA teams are the perfect vehicle to attack these unwanted and unneeded costs, if they are organized to do so. If you think you will need some help in doing so, please give us a call at 800-220-4271 or email us at ryokl@SVAHSolutions.com.
  5. Trusting that their MMIS or MRP system can uncover this waste and inefficiency. MMIS and MRP systems were built to be transactional, not to provide the supply utilization analytics you need to uncover your utilization misalignments. And it would take months to even collect the most basic data you would need to get started with your search for utilization misalignments.

We are all talking about supply utilization savings, but are we really attacking these costs with the right attitude and right information, and do we have the right tools that make the difference? If you can answer these questions with a yes, then you are well on your way to double-digit supply utilization savings that will boost your healthcare organization’s bottom line – almost overnight.


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